Thank your bank for the see-saw property market (and the Government!)

Maybe I'm giving banks too much credit but try and borrow for a project these days. Even though they blame Government policies, in reality they just want to lend to home buyers and yes government capital retention policies do dictate this .

But with home buyers able to buy - but developers not able to get funding the inevitable see-saw action happens. Not much happens… not much supply…soaring prices…not much happens…not much supply …soaring prices etc. A total broken record on repeat .

In addition in the great times when the Government prints and gives away money, they compete with private projects for construction. Inevitably the Government wins, as they grab the majority of firms. Why wouldn't you as a construction company work hard to get - say the Auckland train set. Initial price $3.4b. Current forecast completion cost. $4.4b. So if you don't have your calculator that's a 30% increase.
Or tender for the Puhoi to Warkworth motorway. Does it really take that long to build a road?

The final issue is immigration. If we could just reach an accord between the political parties, or create a reserve immigration bank that called the shots and allow the number of immigrants we need each year to easily arrive. This turn the tap on and off immigration policy comes with huge pressure on property.

The point is that house prices are just the result of Governments and bank policy, and everything else is just noise. Once the banks view real estate like a business manufacturing a product (i.e. they will fund it continuously) and the Government has a steady immigration policy and decides to build massive projects, in the lows we may get some changes. Until then enjoy your house gains every 10 years. You haven't earned them. They are a gift from banks and Government!

Apologies, it's much easier these days to blog negativity than positivity!!